Features
Asymmetric federalism
The position of the Hong Kong dollar would be maintained. Even the lease of land would be valid after 1997 for 50 years with some stipulations.
By SUBRATA MUKHERJEE
The century of humiliation for the Chinese began with the Opium Wars beginning in 1839. Chinese tea became a part of the British drinking habit in the 19th century, but the Qing dynasty did not have any inclination to buy manufactured items from Britain. The demand for tea was enormous leading to a balance of payments crisis as the Chinese insisted that the payment be made either in gold or silver. The imperial and expansionist government of Queen Victoria was averse to using the country’s reserves of gold and silver and the tea importation tax imposed by the British was a large percentage of the British economy. To offset this balance of payment crisis the British administration forcibly exported opium from the Indian subcontinent to China. Opium for the British would be the barter for tea. The Chinese government objected to this huge export of narcotics forcibly by a foreign power. At that time the ill-effects of opium were less known and for the majority of the Britishers it was a medicine.
But the Chinese experience was different and alarming because the addiction impacted the economy and the armed forces. In England, liberal leaders like Gladstone (1809-98) recognised the dangers of opium use and objected to its export but the special interest group that made a huge fortune out of the opium trade which included even the grandfather of Franklin D Roosevelt (1882-1945) could easily resist such opposition. This powerful interest group sidelined the rational and moral objections of liberals like Gladstone. The Qing government found to its dismay that the ban on opium was ineffective as the British merchants could easily smuggle the drug into China. To stop it in 1839, the Chinese officials took direct action destroying 20,000 bales of opium, each chest containing 140 pounds of this narcotic. An angry Britain declared war to protect its illegal but very profitable trade. The first opium war lasted from 1839 to 1842. During the war Britain invaded the Chinese mainland and occupied the island of Hong Kong on 25 January 1841, using it as a military garrison. China had to cede Hong Kong to Britain by the Treaty of Nanking.
Thus, Hong Kong became a crown colony of the British which lasted till 1997. But the dispute over the opium trade was not resolved and that led to the second Opium war (1856-60). The settlement of the war through the first Peking convention was ratified on 18 October 1860 by which Britain acquired the Kowloon peninsula and stone cutter’s island. But security concerns regarding the free port developed by the British worried them as it was an isolated island surrounded by many islands under Chinese control. To settle it on 9 June 1898, the British signed a deal with the Chinese to lease Hong Kong, Kowloon and the new territories which included an important river and more than 200 small islands. The British tried for outright ownership but the Chinese, though weakened by the first Sino-Japanese war of 1895, could still negotiate a legally binding lease for 99 years. After Mao’s stewardship, and during the initial years of Deng’s rule, two basic principles were spelt out as a process of socialist modernisation: (1) reunification of the motherland and (2) building a proper security apparatus for the nation. Praising the work begun by Chairman Mao, it narrated how China has developed in the past 35 years.
The impact of this was not only that China has been able to create a socialist society, but it had also changed the ‘course of human history’. It also mentioned the counter revolutionary activities of the Gang of Four and praised Mao for guiding the nation with proper policies with emphasis on adaptability to ever changing situations. On this basis, the nation achieved stability, unity, democracy, and the rule of law. Deng used to remind Chinese audiences that the Chinese have the longest unbroken civilization of more than 5,000 years. The implication of this was that the interlude of foreign domination was a mere hundred years, and the Chinese were destined to get back their ancient pride in a modernized way. This longer historical perspective was a basic policy of Mao as well, as he strategized that though they could easily run over Hong Kong and Macao he followed a game of patience with “long term planning and full utilization of the present colonial governance of Hong Kong”. Deng who never publicly denounced Mao’s excesses unlike Khrushchev’s denunciation of Stalin, followed the Mao-Zhou strategy and steered the reunification process by a novel innovation of “one country, two systems”.
Margaret Thatcher after her triumph in the Falkland Islands War (1982) and her re-election with a larger majority tried to explore the feasibility of returning to China the new territories including the main Hong Kong whose lease would expire in 1997 but keeping the southern tips of Kowloon peninsula and Hong Kong islands protecting British primacy. But she could not pursue this policy as her close advisers had pointed to the indefensibility of such an arrangement. Thatcher realized holding on to Hong Kong beyond 1997 was not possible. She used her diplomatic skills to negotiate with the Chinese authorities what she thought would be the best deal for inhabitants of Hong Kong. But the people were not consulted and by and large they were unhappy with the deal. Two important issues dominated British thinking: one was sovereignty, and the other was immigration. Thatcher wanted to avoid large-scale immigration for the fear of losing support within the Conservative Party. On the other hand, if she unconditionally handed over Hong Kong then questions would be raised as to why she put all her strength in retaining the Falkland Islands in which many British soldiers lost their lives.
But realizing that talks could not be postponed, a secret UK government document cautioned Thatcher “what she could not do particularly in light of the recent Falkland Islands problem, was simply to announce, ‘we had conceded sovereignty over Hong Kong’.” After protracted negotiations both sides agreed to a compromise ‘One Country Two Systems” which would have Hong Kong governed by its basic law but accepting Chinese sovereignty and control. China received sovereign rights over the entire territory, while accepting that Hong Kong would enjoy a considerable degree of autonomy for fifty years ending in 2047. This had been thought through over a long period, since the Third Plenary Session of the Chinese Communist Party in December 1978. It evolved to settle the unsettled questions of Hong Kong and Taiwan. It was a policy of accepting totally different systems within one nation ~ a population of one billion following the socialist model, whereas understanding the different historical evolution of Hong Kong and Taiwan and contemporary circumstances, it was appropriate to accept their capitalistic systems. This position announced in 1984 was to ascertain the period of transition from 1984 to 1997.
The emphasis was on this crucial period of 13 years and the framework was specified. The position of the Hong Kong dollar would be maintained. Even the lease of land would be valid after 1997 for 50 years with some stipulations. There would be no enhancement of the number of personnel and their pay in the government services. Without consultation with mainland China, no administrators were to be imposed on the Hong Kong Special Administrative Region. The British Hong Kong Government would ensure that there was no flight of capital. The emphasis was on cooperation between the Chinese and British governments. Basis this agreement, the expectation was that one country, two systems would work during this period of transition. Such a plan of peaceful transition of power would “serve as an example for other nations in settling the disputes history has bequeathed to them”. The pragmatism of the Communists to maintain the status of Hong Kong and the colony’s economic system to supplement foreign currency for China was guided by self-interest.
To achieve it a vast network of businesses and banks were owned by the Communists in the colony, the most important of which was the Bank of China through which profits of Communist-owned businesses and banks and lucrative amounts of remittances were transferred to Beijing. This was more than half of China’s foreign exchange earnings. This economic reason created confidence in the residents of Hong Kong that China would not attempt to annex Hong Kong as it was immensely useful to China. The 1967 riots that took place in Hong Kong as a spillover of the cultural revolution in China was out of a fear that in case of Hong Kong being annexed, Hong Kong communists would be termed as revisionists. The Gang of Four added to this feeling but Mao and Zhou had no such intent and Hong Kong’s status continued to remain intact even after the riots. The colonial British administration did not think of drastic democratic reforms or participation of the local people as there were only token reforms.
The handling of Macao and Hong Kong by the Chinese leadership under Mao-Zhou and subsequently under Deng prove the essential pragmatism of the Communist leadership. They were not in a hurry because they realized it was a major source of maintaining contact with the wealthy western nations and, after the split with the Soviets, a counter-balancing force. The question of democracy became muted as the British administration never seriously thought of incorporating the local inhabitants in the decision-making process. It showed that a party state can conceive strategies which would be dismissed as heresy by traditional Eurocentric Marxists but yielded positive results for Chinese development and survival.
Without any foreign aid China could manage its affairs and could accommodate a form of asymmetric federalism while within its own power structure it was unthinkable. After the transfer of power, the relative importance of Hong Kong has diminished as it now handles only 3 per cent of Chinese trade. But in per capita income it is far ahead of China, with an income of $49661 against China’s $12,551. But it is also ahead of Great Britain whose per capita income is $32,555. However, many Chinese universities have surpassed Hong Kong in world ranking. As the present balance is working well, it can safely be presumed that even after 2047 the special status of Hong Kong would continue.
(The Statesman/ANN)
by Dr Gotabhya Ranasinghe
Senior Consultant Cardiologist
National Hospital Sri Lanka
When we sought a meeting with Hon Dr. Ramesh Pathirana, Minister of Health, he graciously cleared his busy schedule to accommodate us. Renowned for his attentive listening and deep understanding, Minister Pathirana is dedicated to advancing the health sector. His openness and transparency exemplify the qualities of an exemplary politician and minister.
Dr. Palitha Mahipala, the current Health Secretary, demonstrates both commendable enthusiasm and unwavering support. This combination of attributes makes him a highly compatible colleague for the esteemed Minister of Health.
Our discussion centered on a project that has been in the works for the past 30 years, one that no other minister had managed to advance.
Minister Pathirana, however, recognized the project’s significance and its potential to revolutionize care for heart patients.
The project involves the construction of a state-of-the-art facility at the premises of the National Hospital Colombo. The project’s location within the premises of the National Hospital underscores its importance and relevance to the healthcare infrastructure of the nation.
This facility will include a cardiology building and a tertiary care center, equipped with the latest technology to handle and treat all types of heart-related conditions and surgeries.
Securing funding was a major milestone for this initiative. Minister Pathirana successfully obtained approval for a $40 billion loan from the Asian Development Bank. With the funding in place, the foundation stone is scheduled to be laid in September this year, and construction will begin in January 2025.
This project guarantees a consistent and uninterrupted supply of stents and related medications for heart patients. As a result, patients will have timely access to essential medical supplies during their treatment and recovery. By securing these critical resources, the project aims to enhance patient outcomes, minimize treatment delays, and maintain the highest standards of cardiac care.
Upon its fruition, this monumental building will serve as a beacon of hope and healing, symbolizing the unwavering dedication to improving patient outcomes and fostering a healthier society.We anticipate a future marked by significant progress and positive outcomes in Sri Lanka’s cardiovascular treatment landscape within the foreseeable timeframe.
by Fr. Emmanuel Fernando, OMI
Jesuit Fr. Aloysius Pieris (affectionately called Fr. Aloy) celebrated his 90th birthday on April 9, 2024 and I, as the editor of our Oblate Journal, THE MISSIONARY OBLATE had gone to press by that time. Immediately I decided to publish an article, appreciating the untiring selfless services he continues to offer for inter-Faith dialogue, the renewal of the Catholic Church, his concern for the poor and the suffering Sri Lankan masses and to me, the present writer.
It was in 1988, when I was appointed Director of the Oblate Scholastics at Ampitiya by the then Oblate Provincial Fr. Anselm Silva, that I came to know Fr. Aloy more closely. Knowing well his expertise in matters spiritual, theological, Indological and pastoral, and with the collaborative spirit of my companion-formators, our Oblate Scholastics were sent to Tulana, the Research and Encounter Centre, Kelaniya, of which he is the Founder-Director, for ‘exposure-programmes’ on matters spiritual, biblical, theological and pastoral. Some of these dimensions according to my view and that of my companion-formators, were not available at the National Seminary, Ampitiya.
Ever since that time, our Oblate formators/ accompaniers at the Oblate Scholasticate, Ampitiya , have continued to send our Oblate Scholastics to Tulana Centre for deepening their insights and convictions regarding matters needed to serve the people in today’s context. Fr. Aloy also had tried very enthusiastically with the Oblate team headed by Frs. Oswald Firth and Clement Waidyasekara to begin a Theologate, directed by the Religious Congregations in Sri Lanka, for the contextual formation/ accompaniment of their members. It should very well be a desired goal of the Leaders / Provincials of the Religious Congregations.
Besides being a formator/accompanier at the Oblate Scholasticate, I was entrusted also with the task of editing and publishing our Oblate journal, ‘The Missionary Oblate’. To maintain the quality of the journal I continue to depend on Fr. Aloy for his thought-provoking and stimulating articles on Biblical Spirituality, Biblical Theology and Ecclesiology. I am very grateful to him for his generous assistance. Of late, his writings on renewal of the Church, initiated by Pope St. John XX111 and continued by Pope Francis through the Synodal path, published in our Oblate journal, enable our readers to focus their attention also on the needed renewal in the Catholic Church in Sri Lanka. Fr. Aloy appreciated very much the Synodal path adopted by the Jesuit Pope Francis for the renewal of the Church, rooted very much on prayerful discernment. In my Religious and presbyteral life, Fr.Aloy continues to be my spiritual animator / guide and ongoing formator / acccompanier.
Fr. Aloysius Pieris, BA Hons (Lond), LPh (SHC, India), STL (PFT, Naples), PhD (SLU/VC), ThD (Tilburg), D.Ltt (KU), has been one of the eminent Asian theologians well recognized internationally and one who has lectured and held visiting chairs in many universities both in the West and in the East. Many members of Religious Congregations from Asian countries have benefited from his lectures and guidance in the East Asian Pastoral Institute (EAPI) in Manila, Philippines. He had been a Theologian consulted by the Federation of Asian Bishops’ Conferences for many years. During his professorship at the Gregorian University in Rome, he was called to be a member of a special group of advisers on other religions consulted by Pope Paul VI.
Fr. Aloy is the author of more than 30 books and well over 500 Research Papers. Some of his books and articles have been translated and published in several countries. Among those books, one can find the following: 1) The Genesis of an Asian Theology of Liberation (An Autobiographical Excursus on the Art of Theologising in Asia, 2) An Asian Theology of Liberation, 3) Providential Timeliness of Vatican 11 (a long-overdue halt to a scandalous millennium, 4) Give Vatican 11 a chance, 5) Leadership in the Church, 6) Relishing our faith in working for justice (Themes for study and discussion), 7) A Message meant mainly, not exclusively for Jesuits (Background information necessary for helping Francis renew the Church), 8) Lent in Lanka (Reflections and Resolutions, 9) Love meets wisdom (A Christian Experience of Buddhism, 10) Fire and Water 11) God’s Reign for God’s poor, 12) Our Unhiddden Agenda (How we Jesuits work, pray and form our men). He is also the Editor of two journals, Vagdevi, Journal of Religious Reflection and Dialogue, New Series.
Fr. Aloy has a BA in Pali and Sanskrit from the University of London and a Ph.D in Buddhist Philosophy from the University of Sri Lankan, Vidyodaya Campus. On Nov. 23, 2019, he was awarded the prestigious honorary Doctorate of Literature (D.Litt) by the Chancellor of the University of Kelaniya, the Most Venerable Welamitiyawe Dharmakirthi Sri Kusala Dhamma Thera.
Fr. Aloy continues to be a promoter of Gospel values and virtues. Justice as a constitutive dimension of love and social concern for the downtrodden masses are very much noted in his life and work. He had very much appreciated the commitment of the late Fr. Joseph (Joe) Fernando, the National Director of the Social and Economic Centre (SEDEC) for the poor.
In Sri Lanka, a few religious Congregations – the Good Shepherd Sisters, the Christian Brothers, the Marist Brothers and the Oblates – have invited him to animate their members especially during their Provincial Congresses, Chapters and International Conferences. The mainline Christian Churches also have sought his advice and followed his seminars. I, for one, regret very much, that the Sri Lankan authorities of the Catholic Church –today’s Hierarchy—- have not sought Fr.
Aloy’s expertise for the renewal of the Catholic Church in Sri Lanka and thus have not benefited from the immense store of wisdom and insight that he can offer to our local Church while the Sri Lankan bishops who governed the Catholic church in the immediate aftermath of the Second Vatican Council (Edmund Fernando OMI, Anthony de Saram, Leo Nanayakkara OSB, Frank Marcus Fernando, Paul Perera,) visited him and consulted him on many matters. Among the Tamil Bishops, Bishop Rayappu Joseph was keeping close contact with him and Bishop J. Deogupillai hosted him and his team visiting him after the horrible Black July massacre of Tamils.
Sri Lanka-Singapore Free Trade Agreement
By Gomi Senadhira
senadhiragomi@gmail.com
“You might tell fairy tales, but the progress of a country cannot be achieved through such narratives. A country cannot be developed by making false promises. The country moved backward because of the electoral promises made by political parties throughout time. We have witnessed that the ultimate result of this is the country becoming bankrupt. Unfortunately, many segments of the population have not come to realize this yet.” – President Ranil Wickremesinghe, 2024 Budget speech
Any Sri Lankan would agree with the above words of President Wickremesinghe on the false promises our politicians and officials make and the fairy tales they narrate which bankrupted this country. So, to understand this, let’s look at one such fairy tale with lots of false promises; Ranil Wickremesinghe’s greatest achievement in the area of international trade and investment promotion during the Yahapalana period, Sri Lanka-Singapore Free Trade Agreement (SLSFTA).
It is appropriate and timely to do it now as Finance Minister Wickremesinghe has just presented to parliament a bill on the National Policy on Economic Transformation which includes the establishment of an Office for International Trade and the Sri Lanka Institute of Economics and International Trade.
Was SLSFTA a “Cleverly negotiated Free Trade Agreement” as stated by the (former) Minister of Development Strategies and International Trade Malik Samarawickrama during the Parliamentary Debate on the SLSFTA in July 2018, or a colossal blunder covered up with lies, false promises, and fairy tales? After SLSFTA was signed there were a number of fairy tales published on this agreement by the Ministry of Development Strategies and International, Institute of Policy Studies, and others.
However, for this article, I would like to limit my comments to the speech by Minister Samarawickrama during the Parliamentary Debate, and the two most important areas in the agreement which were covered up with lies, fairy tales, and false promises, namely: revenue loss for Sri Lanka and Investment from Singapore. On the other important area, “Waste products dumping” I do not want to comment here as I have written extensively on the issue.
1. The revenue loss
During the Parliamentary Debate in July 2018, Minister Samarawickrama stated “…. let me reiterate that this FTA with Singapore has been very cleverly negotiated by us…. The liberalisation programme under this FTA has been carefully designed to have the least impact on domestic industry and revenue collection. We have included all revenue sensitive items in the negative list of items which will not be subject to removal of tariff. Therefore, 97.8% revenue from Customs duty is protected. Our tariff liberalisation will take place over a period of 12-15 years! In fact, the revenue earned through tariffs on goods imported from Singapore last year was Rs. 35 billion.
The revenue loss for over the next 15 years due to the FTA is only Rs. 733 million– which when annualised, on average, is just Rs. 51 million. That is just 0.14% per year! So anyone who claims the Singapore FTA causes revenue loss to the Government cannot do basic arithmetic! Mr. Speaker, in conclusion, I call on my fellow members of this House – don’t mislead the public with baseless criticism that is not grounded in facts. Don’t look at petty politics and use these issues for your own political survival.”
I was surprised to read the minister’s speech because an article published in January 2018 in “The Straits Times“, based on information released by the Singaporean Negotiators stated, “…. With the FTA, tariff savings for Singapore exports are estimated to hit $10 million annually“.
As the annual tariff savings (that is the revenue loss for Sri Lanka) calculated by the Singaporean Negotiators, Singaporean $ 10 million (Sri Lankan rupees 1,200 million in 2018) was way above the rupees’ 733 million revenue loss for 15 years estimated by the Sri Lankan negotiators, it was clear to any observer that one of the parties to the agreement had not done the basic arithmetic!
Six years later, according to a report published by “The Morning” newspaper, speaking at the Committee on Public Finance (COPF) on 7th May 2024, Mr Samarawickrama’s chief trade negotiator K.J. Weerasinghehad had admitted “…. that forecasted revenue loss for the Government of Sri Lanka through the Singapore FTA is Rs. 450 million in 2023 and Rs. 1.3 billion in 2024.”
If these numbers are correct, as tariff liberalisation under the SLSFTA has just started, we will pass Rs 2 billion very soon. Then, the question is how Sri Lanka’s trade negotiators made such a colossal blunder. Didn’t they do their basic arithmetic? If they didn’t know how to do basic arithmetic they should have at least done their basic readings. For example, the headline of the article published in The Straits Times in January 2018 was “Singapore, Sri Lanka sign FTA, annual savings of $10m expected”.
Anyway, as Sri Lanka’s chief negotiator reiterated at the COPF meeting that “…. since 99% of the tariffs in Singapore have zero rates of duty, Sri Lanka has agreed on 80% tariff liberalisation over a period of 15 years while expecting Singapore investments to address the imbalance in trade,” let’s turn towards investment.
Investment from Singapore
In July 2018, speaking during the Parliamentary Debate on the FTA this is what Minister Malik Samarawickrama stated on investment from Singapore, “Already, thanks to this FTA, in just the past two-and-a-half months since the agreement came into effect we have received a proposal from Singapore for investment amounting to $ 14.8 billion in an oil refinery for export of petroleum products. In addition, we have proposals for a steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million), sugar refinery ($ 200 million). This adds up to more than $ 16.05 billion in the pipeline on these projects alone.
And all of these projects will create thousands of more jobs for our people. In principle approval has already been granted by the BOI and the investors are awaiting the release of land the environmental approvals to commence the project.
I request the Opposition and those with vested interests to change their narrow-minded thinking and join us to develop our country. We must always look at what is best for the whole community, not just the few who may oppose. We owe it to our people to courageously take decisions that will change their lives for the better.”
According to the media report I quoted earlier, speaking at the Committee on Public Finance (COPF) Chief Negotiator Weerasinghe has admitted that Sri Lanka was not happy with overall Singapore investments that have come in the past few years in return for the trade liberalisation under the Singapore-Sri Lanka Free Trade Agreement. He has added that between 2021 and 2023 the total investment from Singapore had been around $162 million!
What happened to those projects worth $16 billion negotiated, thanks to the SLSFTA, in just the two-and-a-half months after the agreement came into effect and approved by the BOI? I do not know about the steel manufacturing plant for exports ($ 1 billion investment), flour milling plant ($ 50 million) and sugar refinery ($ 200 million).
However, story of the multibillion-dollar investment in the Petroleum Refinery unfolded in a manner that would qualify it as the best fairy tale with false promises presented by our politicians and the officials, prior to 2019 elections.
Though many Sri Lankans got to know, through the media which repeatedly highlighted a plethora of issues surrounding the project and the questionable credentials of the Singaporean investor, the construction work on the Mirrijiwela Oil Refinery along with the cement factory began on the24th of March 2019 with a bang and Minister Ranil Wickremesinghe and his ministers along with the foreign and local dignitaries laid the foundation stones.
That was few months before the 2019 Presidential elections. Inaugurating the construction work Prime Minister Ranil Wickremesinghe said the projects will create thousands of job opportunities in the area and surrounding districts.
The oil refinery, which was to be built over 200 acres of land, with the capacity to refine 200,000 barrels of crude oil per day, was to generate US$7 billion of exports and create 1,500 direct and 3,000 indirect jobs. The construction of the refinery was to be completed in 44 months. Four years later, in August 2023 the Cabinet of Ministers approved the proposal presented by President Ranil Wickremesinghe to cancel the agreement with the investors of the refinery as the project has not been implemented! Can they explain to the country how much money was wasted to produce that fairy tale?
It is obvious that the President, ministers, and officials had made huge blunders and had deliberately misled the public and the parliament on the revenue loss and potential investment from SLSFTA with fairy tales and false promises.
As the president himself said, a country cannot be developed by making false promises or with fairy tales and these false promises and fairy tales had bankrupted the country. “Unfortunately, many segments of the population have not come to realize this yet”.
(The writer, a specialist and an activist on trade and development issues . )
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